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Talwalkars Better Value Fitness (Q3 FY14)

Talwalkars posted ~28% yoy rise in net sales on the back of gym additions which now stand at 149 (including 103 owned gyms) vs 135 at the start of fiscal

January 01, 1970 5:30 IST | India Infoline News Service
CMP Rs139, Target Rs190, Upside 36.9% 
  • Talwalkars posted ~28% yoy rise in net sales on the back of gym additions which now stand at 149 (including 103 owned gyms) vs 135 at the start of fiscal


  • Margin expanded >500bps on improved staff utilization and slower rise in admin & other expenses; PAT growth of ~20% yoy trailed EBDITA due to sharp 93% yoy jump in depreciation


  • Company added two HiFi centres in Q3 while Zumba offerings were expanded to 46 centres across 31 cities


  • We tweak our earnings forecasts for next fiscal and also introduce FY16 estimates; retain our bullish stance on the back of robust ~22% EPS cagr over FY14-16 with unchanged 9-12mth target of Rs190 

Results table (consolidated)
(Rs m)
Q3 FY14
Q3 FY13
% yoy
Revenues
330
259
27.7
Staff
(58)
(55)
4.6
Admin & other expenses
(118)
(96)
23.5
Operating profit
154
107
43.5
OPM (%)
46.6
41.5
513 bps
Depreciation
(68)
(36)
92.8
Interest
(32)
(30)
5.3
PBT
54
42
29.0
Tax
(12)
(8)
53.5
Effective tax rate (%)
22.0
18.4
360 bps
Adjusted PAT
42
34
23.5
Adj. PAT margin (%)
12.8
13.2
(44) bps
Minority int
(7)
(5)
40.6
Reported PAT
35
29
19.9
Source: Company, India Infoline Research
 
Financial summary
Y/e 31 Mar (Rs m)
FY13
FY14E
FY15E
FY16E
Revenues
1,509
1,864
2,234
2,573
yoy growth (%)
26.4
23.6
19.8
15.2
Operating profit
726
899
1,074
1,243
OPM (%)
48.1
48.2
48.1
48.3
Reported PAT
300
354
434
527
yoy growth (%)
36.2
17.7
22.6
21.4
EPS (Rs)
12.5
14.7
18.0

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